DISCUS Finds Spirits Exports Rebounding
A new export report released today by the Distilled Spirits Council of the United States (DISCUS) shows that U.S. spirits exports are gradually rebounding following the lifting of the EU and UK retaliatory tariffs on American whiskeys and other spirits categories.
The report found that during January-July 2022, total U.S. spirits exports, including American whiskey, increased by 21% and 22%, respectively, over the same period last year. Total 2021 U.S. spirits exports increased 14% compared to 2020, reaching $1.6 billion -- a level still below the 2018 pre-tariff levels of approximately $1.8 billion.
“While U.S. spirits exports tumbled between 2018 and 2021 due largely to retaliatory tariffs on American spirits imposed by the EU and UK, this latest data is an encouraging sign that consumers in these key export markets are beginning to return to purchasing American spirits,” said Rob Maron, DISCUS vp-international trade. “We applaud the Biden administration for securing important agreements to suspend retaliatory tariffs on American spirits and are working to return to permanent duty-free trade in spirits.”
The U.S. and EU reached an agreement in October 2021 to suspend the EU’s 25% retaliatory tariff on American whiskeys for two years effective January 1, 2022. The U.S. reached an agreement with the EU in June 2021 to lift retaliatory tariffs on American rum, brandy and vodka for five years effective July 11, 2021. The U.S. and UK reached an agreement in March 2022 to remove the UK’s 25% retaliatory tariff on American whiskeys on June 1, 2022.
Among the key insights in the report:
The value of U.S. spirits exports increased 21% through the first seven months of 2022, compared to the same period a year ago. The dollar value jumped $1 billion. Approximately 32% of U.S. spirits were exported to the EU through July 2022 (totaling $331.8 million), making it the U.S.’s largest export market. Total U.S. spirits exports to the EU saw an 18% increase compared to the
same period in 2021.
American whiskeys continued to drive overall U.S. spirits exports through July. American Whiskeys accounted for 61% of all spirits exports in value terms, and 43% in volume terms. The top five markets for American Whiskeys during this period are European Union ($264.8 million), Japan ($60.7million), Australia ($58.1 million), United Kingdom ($51.7 million) and Canada ($45.1 million).
The U.S. continues to export a wide range of distilled spirits. Some of the growth in American spirits exports can be attributed to the strong performance of the American brandy, vodka, and liqueur and cordials categories. Compared with the same period in 2021, through July 2022 U.S. exports of vodka increased by 40% to $59.3 million, brandy increased by 31% to $11.1 million, and liqueurs and cordials increased by 30% reaching $79.1 million.
Finally, the report noes that U.S. spirits exports to other duty-free markets far surpass those that maintain high tariffs. U.S. spirits exports to free trade agreement countries and those with zero duties reached $857.7 million
through July 2022, accounting for 84% of total U.S. spirits exports.
In contrast, U.S. spirits exports to high tariff countries, such as India (150% tariff), Vietnam (45% tariff), and Brazil (20% tariff on all imported distilled spirits, except bulk whiskey, which is 12% tariff) reached $31.5 million, accounting for only 3% of total U.S. spirits exports through July 2022.